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Biofuels Are Not Limited to Corn Ethanol

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It’s true that if we attempt to meet George Bush’s Renewable Fuel Standards (RFS) (36 Bgals of renewable fuels by 2022) only with corn ethanol, food prices will rise as a result. But, as has been written before on this site, the rise in food prices in 2008 had more to do with petroleum prices than with ethanol.

So, if we fail to diversify our energy matrix, food prices and much of the economy as a whole will be subject to the high volatility in petroleum prices. Developing other ways of fueling our transportation fleets, and reducing the amount we transport ourselves and our goods, will go much further in terms of protecting ourselves from this volatility than will eliminating our biofuels efforts.

I’m not a proponent of corn ethanol, but I am a big proponent of objective, accurate information. So it’s also important to note that the RFS caps corn ethanol at 15B gals in 2015 (we’re now producing about 12B gals/yr). That’s still a lot, and I’m not convinced it’s a great idea, but, ceteris paribus (it means, all things being equal–Latin is fun), food prices will not likely rise much more due to corn ethanol. The rest of the biofuels we produce to meet those federal standards are supposed to come from grasses, trees, and agriculture residues. There’s still plenty that can go wrong with that, but other issues aren’t addressed in the article below, so I’ll end here.

Thanks for reading.

ps, I both dig and am disturbed by getting information from a source that provides news only if I can profit from it.

January 28, 2011

By Kerri Shannon, Associate Editor, Money Morning

U.S. Clean Energy Investment Puts Upward Pressure on Rising Food Prices

In U.S. President Barack Obama’s State of the Union address Tuesday, he highlighted clean energy investment as a key component of America’s future, one that will be reflected in his budget proposal for fiscal 2012.

“With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have a million electric vehicles on the road by 2015,” the president said in his speech to members of Congress. “[I]nstead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.”

This commitment to clean energy investment increases the importance of biofuels like ethanol, made from corn and other agricultural products. About 40% of U.S. corn is used to make ethanol, and increased ethanol production leads to higher corn and food prices.

Read the entire article here.

Written by Jason

January 31st, 2011 at 7:31 pm

Al Gore Finally Opposes Corn Ethanol

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An editorial in The Wall Street Journal this morning discusses Al Gore’s apparent change of heart from supporter to opponent of subsidies for corn ethanol in the U.S.

It’s not that I’ve ever put much stock in Al Gore. I’m glad he’s helping more Americans understand the importance of environmental health, but I don’t think climate change science is the way to do it.

The article below provokes two different, almost visceral reactions in me: One to corn ethanol and one to the attention paid to climate change.

Climate Change:

Whether or not it’s accurate to say that the climate is changing in negative ways, and that humans are the cause of it, it’s simply too distant to most people’s daily lives for it to gain real traction in making change.

For example, Hurricane Katrina: Did a one degree increase in the Caribbean Sea’s temperature drive the wind and rain that much harder into New Orleans to make the storm so much more severe that it led to thousands of deaths? Was that temperature increase caused by humans?

Hurricane Katrina was clearly a terrible event, and many things went wrong there, but in terms of the environmental facets, the climate change discussion distracts us from the real and tangible fact that WE MOVED A RIVER!

Isn’t there a sufficiently poignant lesson to learn in seeing the terror of what happened when the river moved back? Digressing into the chemistry of atmospheric leads us away from tangible facts that can induce real and effective change.

Similarly, we don’t need to convince someone of climate change for them to understand why it’s not healthy for our lungs to go jogging next to a freeway. Their lungs help them to understand, without Gore’s Powerpoint, why we should work to limit vehicle emissions.

Can we focus on solutions when we see problems? How am I supposed to understand the real impacts of my own actions when I’m focusing on that one degree change and my possible role in it?

I can’t believe anyone would still be reading at this point, and this site has enough about my thoughts on the inefficiency of corn ethanol, so thanks if you’re still here.

Suffice it to say that I’m glad Al Gore has joined the chorus of those opposing subsidies for corn ethanol. Now if he could convince Obama to go back to his earlier criticisms of this boondoggle, we’d be making some real progress.

Rather than continuing on that subject that’s been discussed so often, I’ll hold off and let you continue to the Journal’s editorial.

  • NOVEMBER 27, 2010

Al Gore’s Ethanol Epiphany

He concedes the industry he promoted serves no useful purpose.

Anyone who opposes ethanol subsidies, as these columns have for decades, comes to appreciate the wisdom of St. Jude. But now that a modern-day patron saint—St. Al of Green—has come out against the fuel made from corn and your tax dollars, maybe this isn’t such a lost cause.

Welcome to the college of converts, Mr. Vice President. “It is not a good policy to have these massive subsidies for first-generation ethanol,” Al Gore told a gathering of clean energy financiers in Greece this week. The benefits of ethanol are “trivial,” he added, but “It’s hard once such a program is put in place to deal with the lobbies that keep it going.”

Read the entire article here.

EPA biofuels guidelines could spur production of ethanol from corn

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Washington Post Staff Writer
Thursday, February 4, 2010

An employee checks a storage tank at a biodiesel plant in Aberdeen, Wash. EPA standards could lift production of corn-based ethanol. (Carlos Javier Sasnchez/bloomberg News)

The nation’s farmers got a big boost Wednesday when the Obama administration issued new biofuels guidelines that could open the way for large increases in the production of corn-based ethanol.

The Environmental Protection Agency said new data showed that, even after taking into account increased fertilizer and land use, corn-based ethanol can yield significant climate benefits by displacing conventional gasoline or diesel fuel.

US Ends Tariff on Imported Ethanol

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With surprisingly little fanfare, the US has ended the $0.54 per gallon tariff on imported ethanol. This comes at the same time that Congress also allowed the $0.45 per gallon of ethanol tax credit for blenders to expire, potentially opening the door to much more US importation of Brazilian ethanol, as well as cooperation between the two countries on more advanced biofuels. Brazil was the leading producer of renewable fuel until 2005 when US production of ethanol from corn surpassed production of Brazil’s sugarcane ethanol.

The article below is clearly biased, quoting two top officials from UNICA, Brazil’s powerful sugarcane industry association, without presenting views from American officials who have been opposing these measures as they work to protect domestic energy production and agricultural markets.

That said, decreasing government intervention has always been favored by this humble author, and the elimination of these barriers to trade should make for the more efficient functioning of energy and agricultural markets.

Cooperation between the two largest producers of renewable fuels could also lead to faster development of fuels from non-food crop residues such as corn stover, sugarcane bagasse, and other cellulosic feedstocks.

Congressional Recess Means the End of Three Decades of US Tariffs on Imported Ethanol

Time for the world’s top two ethanol producers, the United States and Brazil, to lead a global effort for increased production and free, unobstructed trade for biofuels, says Brazilian Sugarcane Industry Association.

SAO PAULO, Dec. 23, 2011 /PRNewswire/ — For the first time in more than three decades of generous US government subsidies for the domestic ethanol industry, coupled with a steep tariff on imports, the United States market will be open to imported ethanol as of January 1st, 2012, without protectionist measures. The adjournment of the 112th Congress means both the US$0,54 per gallon tax on imported ethanol and a corresponding tax credit of US$0,45 per gallon for blenders, the VEETC (Volumetric Ethanol Excise Tax Credit), will expire as expected on December 31st.

Continue reading this story here.

Imports of Brazilian Ethanol Nearer as US May End Subsidies

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Just as the US Congress debates whether or not to end subsidies to corn ethanol, Royal Dutch Shell invests heavily in preparations to export Brazilian ethanol to the US.

July 10, 2011 4:37 pm

Shell to focus on exporting ethanol to US

Royal Dutch Shell is gearing up to become the biggest exporter of ethanol to the US, investing heavily in its joint venture in Brazil as global oil companies battle for control of the Latin American country’s sugarcane fields.

Under pressure to reduce the US deficit, lawmakers in Washington are preparing to scrap ethanol subsidies and tariffs – a move that would open up the country to cheaper imports while putting the spotlight on Brazil as the world’s only other leading producer of the biofuel.

[…]

Please respect FT.com’s ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article – http://www.ft.com/cms/s/0/4d7109f8-aafd-11e0-b4d8-00144feabdc0.html#ixzz1S3EqaRRu

“The tariffs will be lifted; it’s just a question of when. That’s why we need to increase production of ethanol quickly,” Vasco Dias, Raízen’s chief executive said in an interview with the Financial Times.

“Our main priority now is to supply the internal market but our ambition is to become a big exporter of ethanol to the US when the time comes, and also to Europe.”

Read the entire article here.

Written by Jason

July 13th, 2011 at 10:39 pm

BP Chief Says Brazilian Ethanol is Best Bet to Replace Petroleum

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There is definitely substantial agricultural land for much more fuel, fiber, and food production in Brazil, as well as preservation of forests and even reforestation, but the headline seems quite an overstatement of the facts.

My PhD research has investigated the potential for Brazil to supply enough ethanol for the U.S. Renewable Fuel Standards, which may have renewables accounting for as much as 20% of our transportation fuels in 2022. There does appear to be sufficient arable land for both Brazilian demand as well as to supply the U.S. for these renewable mandates signed into law by George Bush in 2007.

To say there is enough land to replace all petroleum globally, however, especially considering the booming demand in China and India as their economies expand and have more people driving cars, is a stretch, to say the least.

Between the typos, the outdated photo, and the lack of background research for the article below, I’m wondering where to send my resume for a job at the Telegraph.

Brazilian ethanol is the best hope for replacing oil, says BP’s Bob Dudley

Ethanol derived from Brazilian sugar-cane offers the best hope of replacing oil as the world’s main source of fuel when it runs out, according to Bob Dudley, BP’s chief executive.

Brazilian ethanol is the best hope for replacing oil, says BP's Bob Dudley

By Robin Yapp, in Sao Paulo 7:03PM GMT 13 Feb 2011

He said Brazilian ethanol is the “best type of renewable energy” and offers the possibility of an “ultrapotent fuel that could revolutionise the market”.

“The alcohol extracted from sugar cane is cheaper, less polluting and more efficient than that from corn, for example, produced in the US.

BP is channelling its research into renewable fuels accordingly, with 40pc of its $1bn (£625m) annual spend in this area targeted at Brazilian ethanol, Mr Dudley told the weekly Brazilian news magazine Veja.

“There will obviously a time when the oil runs out and with this prospect on the horizon, we will use more renewable energy sources,” he said.

Read the entire article here.

Written by Jason

February 17th, 2011 at 9:55 pm

Shell Goes All In with Brazilian Ethanol

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First Shell suspends all of its renewable energy efforts except for Brazilian ethanol, and then BP’s chief comes out and says that Brazilian ethanol is the best bet to replace petroleum.

Maybe I’ve missed it, but I haven’t heard anything like this of corn ethanol. Funny.

Cosan, Shell give details on ethanol joint venture

Feb 15, 2011 2:31 AM MT

AMSTERDAM (AP) — Brazilian oil company Cosan SA and Europe’s Royal Dutch Shell PLC say their new ethanol joint venture will have an estimated market value of $12 billion, ranking as Brazil’s 5th-largest company by sales, with 40,000 employees.

When the deal was announced in August, Shell had dropped all other investments in renewable energy to focus on ethanol.

Read the entire article here.

Written by Jason

February 15th, 2011 at 8:15 pm

More Solid Challenges to Government Protection of Ethanol, This Time from the Left

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The article below points out that historically there are three forms government intervention in markets: mandating a product’s use, protecting it from foreign competition through measures such as tariffs, and subsidizing its production.

Corn ethanol benefits, at our expense, from all three.

This does not encourage the kind of innovation that will make domestic, clean energy a larger part of our energy matrix. Instead, it binds us to an inefficient and expensive (made artificially cheap by our tax dollars) practice that is environmentally damaging, not beneficial.

Congress, please, let your baby fend for itself on the free market. Even Al Gore agrees with me.=

  • DECEMBER 5, 2010, 7:10 P.M. ET

Ethanol on the Run

A left-right coalition is emerging against this energy boondoggle.

The political class inevitably invokes the moon shot or Manhattan Project as a model for every unrealistic energy goal, but for once maybe that hyperbole is apt: A left-right coalition is emerging to end ethanol subsidies.

Last week, no fewer than 17 Senators signed a letter calling ethanol “fiscally indefensible” and “environmentally unwise.” Led by Democrat Dianne Feinstein and Republican Jon Kyl, the group said Congress shouldn’t extend certain subsidies that expire at the end of the year, including the 45-cent-per-gallon tax credit for blending ethanol into gasoline and tariffs on cheaper imports. Conservatives like Tom Coburn dislike this costly industrial policy, while liberals like Barbara Boxer and Sheldon Whitehouse are turning against the hefty carbon emissions that come with corn fuels.

Read the entire article here.

Biofuels Beyond Ethanol

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Here are a couple of interesting articles about the next generations of biofuels.

The first two sentences of the first article below are priceless, and quite correct. As expected, the article in The Economist is excellent. It’s not exactly cutting edge, as these technologies have been discussed for well over a year, and it doesn’t look like we’re a whole lot closer now.

As I said in that post above over a year ago, when these fuels do become cost effective and energetically efficient, we will need to be very careful about converting more land to monocultures to produce biomass as feedstocks for these fuels.

The Worldwatch article below addresses this issue obliquely with its hopeful look at algae as a feedstock. We face some of the same problems with algae as we do with cellulosic bofuels–trying to expose the diverse, 5 and 6 carbon sugars for fermentation–as well as the added difficulty in our lack of experience either growing or harvesting algae.

It’ll be a while before any of these are ready for your gs tank, but it’s encouraging that we’re thinking this far ahead.

It’s a fascinating time to be alive.

The future of biofuels

The post-alcohol world

Biofuels are back. This time they might even work

Oct 28th 2010 | London and san francisco

MAKE something people want to buy at a price they can afford. Hardly a revolutionary business strategy, but one that the American biofuels industry has, to date, eschewed. Now a new wave of companies think that they have the technology to change the game and make unsubsidised profits. If they can do so reliably, and on a large scale, biofuels may have a lot more success in freeing the world from fossil fuels than they have had until now.

[…]

That is a start, but it will not be enough, Wood is a possibility, particularly if it is dealt with chemically, rather than biologically (much of the carbon in wood is in the form of lignin, a molecule that is even tougher than cellulose). But energy-rich grasses look like the best bet. Ceres, which is based in Thousand Oaks, California, has taken several species of fast-growing grass, notably switchgrass and sorghum, and supercharged them to grow even faster and put on more weight by using a mixture of selective breeding and genetic engineering. Part of America’s prairies, the firm hopes, will revert to grassland and provide the cellulose that biofuels will need. The Energy Biosciences Institute that BP is funding at the University of Illinois, in Urbana-Champaign, is working on hybrid miscanthus, an ornamental grass that can produce truly remarkable yields.

Read the entire article here.

Third Time’s the Charm, or Three Strikes and You’re Out? Third-Generation Biofuels Are Here

Sam Shrank Revolt 2010-11-01

This entry is the latest in a series on innovations in the climate and energy world.

Ethanol from corn and sugar cane? Beyond passé at this point, with major environmental, land use, and food security concerns.

Second-generation biofuels, made from non-food crops and wastes? So 2008.

The next big thing in biofuels? Algae.

So-called third-generation biofuels have begun to receive serious attention. Biofuels can technically be made from just about any plant material, and some of the advantages of algae are obvious: it wouldn’t compete for arable land, for example, as it is grown in water, and it grows like, well, a weed, allowing for incredible yields.

The two avenues of third-generation development being considered so far are microalgae (pond scum, etc) and macroalgae (seaweed). Research is going into both harvesting algae from its natural environment and creating artificial growing environments.

Various algae have been discussed academically as a potential fuel since 1955. The U.S. Department of Energy has looked into fuels from microalgae since 1978, although the Aquatic Species Program, as it was called, was discontinued in 1996. Since then, various government bodies, including the Department of Defense, National Science Foundation, and Department of Agriculture, have continued to look into algal biofuels.

Read this entire article here.

UNICA Continues Pressure on U.S. to Drop Ethanol Tariff

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To listen to UNICA, the powerful voice of Brazil’s sugarcane and ethanol industry, you’d think the U.S. tariff on imported ethanol would be gone by the end of the week. I don’t see that happening, and definitely don’t think an all-at-once elimination would be good for Brazil.

Ethanol accounts for half of their transportation fuel by volume (slightly less on an energy content basis), and if the U.S. tariff were eliminated, Brazilian producers would likely sell a huge portion of their ethanol to U.S. buyers, forcing Brazilian drivers to pay higher prices, or, more likely, revert to far more gasoline. This could jeopardize Brazil’s energy independence and would impact their balance of trade, though probably only slightly.

Additionally, just as UNICA and the studies they cite may sound certain that this tariff of US$0.54 per gallon is terrible for American drivers, its elimination would not hurt corn farmers, and so is soon to be history, U.S. corn farmers and our ethanol industry, led by Growth Energy, the U.S. counterpart to UNICA, are equally sure that government support is necessary and here to stay.

Let me be clear that I am not a fan of corn ethanol. I have become much more encouraged about cellulosic and other technologies on the near horizon, but still believe that corn is produced irresponsibly and at great harm to ecological, human, and even bovine health. I don’t blame farmers for this, as they are working within a system that rewards growing corn without taking into account the negative externalities.

All this said, the best scenario would likely be reducing the tariff on U.S. importation of Brazilian ethanol to meet the “advanced biofuels” mandates laid out in George Bush’s Renewable Fuels Standards, as allowed by the recent EPA findings in the RFS2 decision in February. This would gradually increase Brazilian ethanol’s presence in the U.S., while also encouraging the much needed move to second and third generation biofuels technologies, reducing our dependence on imported oil and increasing our energy independence and security.

Any of this, of course, must be done in concert with vastly increased efforts towards energy efficiency, driving less, more efficient vehicles, etc.

Here are a few of the pieces from UNICA…

Scholars call for phase-out of U.S. ethanol tariff at Wilson Center seminar
07/26/2010

(left to right) Joel Velasco, Alexandros Petersen, Paulo Sotero,
Robbin Johnson and C. Ford Runge

An open and globalized biofuels market is essential to promote greater efficiency and competitiveness, and phasing out the US$0,54 per gallon tariff imposed by the United States on imported ethanol would be a key step in the right direction. The recommendation came from two University of Minnesota scholars during the “Biofuels: Food, Fuel, and the Future?” panel, organized by the Woodrow Wilson Center in Washington, D.C, on Friday, July 23.

Read the entire article here.

And a second piece, citing the study from the University of Iowa:

Universidade americana vê ganhos para consumidores com fim de tarifa sobre etanol importado
26/07/2010

Em meio a um debate aquecido e ganhando cada vez mais visibilidade nos Estados Unidos, um estudo divulgado na terça-feira (20/07) por um renomado economista agrícola do meio-oeste americano está desafiando conclusões catastróficas, geralmente disseminadas por grupos de lobby do etanol de milho, sobre o que poderia acontecer se a atual tarifa de US$0,54 por galão (3,78 litros) imposta ao etanol importado expirar no final deste ano como planejado. O estudo, realizado por Bruce Babcock, chefe do Centro de Agricultura e Desenvolvimento Rural (CARD em inglês) da Universidade do Estado de Iowa, apresenta um cenário bem diferente.

Read the entire article here.

And the University of Iowa study to which they are referring:

CARD Study Shows U.S. Ethanol Production and Corn Demand Will Grow With or Without Subsidy and Tariff

Contacts:
Bruce A. Babcock ; babcock@iastate.edu
Sandy Clarke; sclarke@iastate.edu

July 20, 2010

America’s growing interest in renewable fuels has spurred a robust discussion about the pros and cons of continuing or changing current U.S. federal government ethanol policies, specifically, (1) mandates to increase the use of renewable fuels like ethanol from approximately 13 billion gallons today to 36 billion gallons by 2022, (2) a 45-cent-per-gallon tax credit for “blenders” who add ethanol to gasoline, and (3) a 54-cent-per-gallon tariff, which increases the price of foreign imports.

Read the entire article here.